Choosing a Solicitor

Equity release is a type of financial product that allows homeowners aged 55 and over to release the equity tied up in their property, without the need to sell or move out. This can be done through either a lifetime mortgage or a home reversion plan.

The purpose of this document is to provide a helpful and valuable resource that covers all points relating to how and why you need an equity release solicitor and answers your potential questions and concerns.

In this document, we will cover the following topics:

• What is an equity release solicitor?
• Why do you need an equity release solicitor?
• How to choose an equity release solicitor
• What to expect from your equity release solicitor
• Costs of using an equity release solicitor
• Common questions and concerns

What is an equity release solicitor?

An equity release solicitor is a legal professional who specializes in equity release transactions. They are there to ensure that you fully understand the legal aspects of the equity release process and to help protect your interests.

Their role in the equity release process includes:

• Checking your eligibility for equity release
• Advising on the legal and financial implications of equity release
• Drafting and reviewing legal documents
• Conducting necessary searches and investigations
• Ensuring that your equity release plan is registered with the Land Registry
• Representing you in any negotiations with the lender or other parties involved in the transaction

The benefits of using an equity release solicitor include:

• Ensuring that you fully understand the terms and conditions of the equity release plan
• Providing you with independent legal advice
• Helping you to avoid potential pitfalls and scams
• Ensuring that your interests are protected throughout the transaction

Why Do You Need an Equity Release Solicitor?

Equity release can be a complex and potentially risky financial product, and it’s important to have legal guidance throughout the process. An equity release solicitor can provide you with the expertise you need to ensure that you fully understand the legal and financial implications of equity release and that you are making the right decision for your circumstances.

Without an equity release solicitor, you could be exposing yourself to potential risks and consequences. For example, you may not fully understand the terms and conditions of the equity release plan, which could lead to unexpected costs or penalties. Additionally, you may not be aware of potential scams or unethical practices that could put your financial security at risk.

Scenario 1

John, a retiree, decided to take out an equity release plan to fund his home renovation project. He researched different equity release plans online and found one that offered a low interest rate and lump sum payment. Excited about the prospect of having the funds to renovate his home, he signed the plan without seeking legal advice from a solicitor.

However, as the renovation project progressed, John noticed that he was being charged unexpected fees and charges that were not clearly explained in the equity release plan. He also realized that he did not fully understand the potential impact of the plan on his inheritance and eligibility for benefits. To make matters worse, he fell victim to a scam artist who promised to help him refinance his plan at a lower interest rate, but instead charged him exorbitant fees and made off with his money.

If John had sought legal guidance from an equity release solicitor, he could have avoided these consequences. A solicitor could have helped him understand the terms of the plan, negotiated better terms on his behalf, and protected him from scams or unethical practices.

Scenario 2

An elderly couple, John and Mary, decided to release equity from their home to fund their retirement. They took out an equity release plan without seeking legal advice or guidance from a solicitor. Unfortunately, they were not aware of the potential impact on their inheritance, and the plan ended up significantly reducing the value of their estate. When John passed away, Mary was left with limited funds and a reduced inheritance for their children and grandchildren. If they had consulted with an equity release solicitor, they could have received valuable guidance on the impact of their decision on their inheritance and taken steps to mitigate any negative consequences.

Using an equity release solicitor is essential to ensure that you fully understand the legal and financial implications of equity release and that your interests are protected throughout the transaction.

How to Choose an Equity Release Solicitor

When choosing an equity release solicitor, it’s important to consider several key qualities to ensure you get the right legal guidance for your needs. Here are some factors to keep in mind:

1. Experience: Look for a solicitor with extensive experience in the equity release market. This can help ensure they have the expertise to guide you through the process.

2. Credentials: When looking for an equity release solicitor, it’s important to ensure they have the appropriate credentials. Here are some sources and information that can help:

• Equity Release Council: This is a trade body that represents the equity release sector in the UK. They have strict rules and standards that members must adhere to, including a code of conduct and ethics. Checking that a solicitor is a member of the Equity Release Council can provide peace of mind that they are operating to industry standards. You can find a list of members on their website: https://www.equityreleasecouncil.com/find-a-member/solicitors/.
• Solicitors Regulation Authority (SRA): The SRA is the regulatory body for solicitors in England and Wales. Checking that a solicitor is regulated by the SRA can provide reassurance that they are a qualified and legitimate legal professional. You can search for solicitors on their website: https://www.sra.org.uk/consumers/register/.
• Law Society: The Law Society is the professional association for solicitors in England and Wales. They provide accreditation for solicitors who demonstrate expertise in specific areas of law, including equity release. Checking that a solicitor has accreditation from the Law Society can provide reassurance of their expertise. You can search for accredited solicitors on their website: https://solicitors.lawsociety.org.uk/.

3. Reputation: Look for a solicitor with a good reputation in the industry.

• Solicitors Regulation Authority (SRA): The SRA is the regulatory body for solicitors in England and Wales. They have a searchable database of solicitors on their website, which provides information on a solicitor’s qualifications, practice areas, and any regulatory action taken against them. This can be a useful resource when researching a solicitor’s reputation. The database is available here: https://www.sra.org.uk/consumers/register/
• Online Reviews: Online reviews and testimonials from past clients can provide valuable insights into a solicitor’s reputation. Sites such as Trustpilot, and VouchedFor are popular platforms for clients to leave reviews of solicitors. However, it’s important to approach online reviews with caution, as they may not always be reliable or accurate. 

4. Recommendations: Recommendations from family, friends, or colleagues who have used an equity release solicitor can be a useful way to find a reputable solicitor. However, it’s still important to do your own research and due diligence to ensure that the solicitor is a good fit for your specific needs and circumstances.

Shopping around for a solicitor is also important to find the right fit for your needs. Don’t be afraid to ask questions and get multiple quotes before making a decision.

What to Expect from Your Equity Release Solicitor

Your equity release solicitor should provide comprehensive legal guidance throughout the equity release process. 

1. Reviewing and explaining legal documents

Here are the legal documents that your solicitor should review and explain in plain language to ensure that you fully understand your obligations and rights during the equity release process:

• Equity Release Questionnaire – This form is your acceptance of the solicitor acting on your behalf and agreement of their terms and conditions. It includes questions related to your eligibility, the amount you wish to borrow, and the property you wish to release equity from.
• Formal offer – Once the lender makes the formal offer, both you and your solicitor will receive separate copies. Your solicitor will review the offer and prepare their legal advice for you, explaining any terms and conditions in plain language.
• Mortgage deed – This document outlines the terms and conditions of the equity release plan, including the amount borrowed, interest rates, and repayment terms. Your solicitor will explain the legal implications of the mortgage deed and ensure that you understand your obligations and rights.
• Title deeds – Your solicitor will obtain an official copy of your title deeds from HM Land Registry to ensure that all details related to your property, including any mortgages or secured loans, are correct.
• Legal and regulatory disclosures – Your solicitor should provide you with all necessary legal and regulatory disclosures, including information about fees and charges, potential risks and consequences, and other important information related to the equity release process.

By reviewing and explaining these documents in plain language, your solicitor can ensure that you fully understand the equity release process and the legal implications of your decisions.

2. Liaising with lenders

Your solicitor should liaise with the lender to ensure the equity release process runs smoothly and any issues are addressed promptly.

3. Providing legal advice

Your solicitor should provide legal advice on any issues that arise during the equity release process, such as tax implications or changes to your estate planning.

4. Ensuring compliance

Your solicitor should ensure compliance with all legal and regulatory requirements, such as those set by the Equity Release Council.

Costs of Using an Equity Release Solicitor

The costs of using an equity release solicitor can vary depending on several factors, such as the complexity of the case and the experience and location of the solicitor. Here are some potential costs associated with using a solicitor:

Legal fees

According to our research the average legal fees for an equity release solicitor are £1,058 including VAT depending on the case. It’s important to get a quote upfront and ensure you understand the fee structure before proceeding.

Disbursements

There may be additional costs associated with disbursements, such as property searches or land registry fees. Your solicitor should provide an itemized breakdown of these costs.

In conclusion

equity release can be a useful financial tool for many individuals, but it’s important to approach it with caution and seek professional guidance throughout the process. By working with an experienced equity release solicitor, you can ensure that your best interests are protected and that you fully understand the implications of your financial decisions.

Key takeaways:

• An equity release solicitor can provide valuable guidance and support throughout the equity release process.
• When choosing a solicitor, look for qualities such as experience, credentials, and reputation.
• Costs associated with using a solicitor can vary, so it’s important to shop around and negotiate fees.
• The equity release market is growing, and staying up-to-date with the latest statistics can help inform financial decisions.

We encourage you to contact an equity release solicitor or financial adviser to discuss your options and determine the best course of action for your individual needs. Additionally, consider using a free equity release calculator to estimate how much money you could release from your home.